The International Monetary Fund will assess any potential changes to Lebanon's bank resolution law to ensure they are consistent with international standards, the multilateral organisation's spokeswoman said on Thursday.
The IMF had welcomed the law, approved in August, as a significant step in efforts to revamp Lebanon's banking sector restructuring strategy and boost the recovery of its economy, whose crisis has been further exacerbated by the conflict with Israel.
The legislation aims to reform the banking sector and allow depositors who have been frozen out of accessing their savings to recover their money gradually.
However, implementation could be delayed, as Lebanese President Joseph Aoun has appealed to the Constitutional Council over one of the amendments concerning the central bank's independence and power.
“The IMF's view is that the bank resolution law that was approved by Parliament is consistent with international standards, which for us is a critical criteria,” IMF communications director Julie Kozack said.
“We do understand now that the law was referred to the Constitutional Council by the President, and so as that process plays out, and if any changes are made to the law through this review process, we will assess those any changes for consistency with international standards, and we would then provide any new advice to the authorities accordingly.”
The law is considered a critical component as Lebanon seeks a new staff-level agreement with the IMF. The government signed an agreement with the IMF in 2022 after the country's economy collapsed due to years of mismanagement and corruption. but the government at the time was slow to implement the changes.
Ms Kozack said other requirements on reaching a staff-level agreement include an appropriate financial gap law consistent with international standards, a 2027 budget, a medium-term fiscal framework and other reforms, including financial management and governance.
Mr Aoun's appeal came after IMF Managing Director hosted Lebanese Prime Minister Nawaf Salam at the fund's headquarters in Washington on Tuesday. Ms Georgieva reaffirmed the fund's willingness to to support Lebanon's development and implementation of an economic reform agenda, the IMF said.
“I congratulated him on recent reform progress, including the approval of amendments to the Bank Resolution Law, which advanced us towards a new fund programme,” Ms Georgieva said in a social media post on Tuesday.
Ms Georgieva and Mr Salam also discussed how Lebanon has “managed to maintain a measure of macroeconomic stability despite exceptionally difficult circumstances facing the country”, Ms Kozack said.
A report from the World Bank in August said the renewed conflict in Israel has derailed Lebanon's “fragile” economic recovery. The World Bank projects Lebanon's economy will contract by 6.4 per cent this year after expanding by 4.2 per cent in 2025. It was the fastest economic expansion since the beginning of the 2019 financial crisis.
The World Bank and IMF are due to update their economic projections for Lebanon later this month.
Along with Mr Nawaf, the Lebanese delegation sent to Washington earlier this week included Finance Minister Yassine Jaber. The delegation on Monday held a meeting with US Treasury Secretary Scott Bessent, who noted the importance of advancing financial sector reforms to re-establish confidence in Lebanon's banking system, the Treasury Department said in a readout.
